The operation of factories, by its nature, inevitably faces unavoidable challenges on environmental concerns, i.e., wastewater, air pollution and disposal of industrial waste. Therefore, Thailand enacted the Factory Act and its amendment No.2 B.E. 2562 (A.D 2019) and No.3 2562 (A.D 2019) (“Act”) to set the guidelines and standards to mitigate and prevent these issues effectively.
On 26 August 2024, the Department of Industrial Work (“DIW”) held a public hearing on the draft on amendment to the Factory Act No.4 of Thailand (“Draft”). The draft primarily emphasizes preventing the illegal disposal of industrial waste, in which a responsibility lies under the supervision of the Ministry of Industry (“MOI”). With the call for immediate action to mitigate or prevent further environmental damage and prevent the spread of pollution, MOI introduces the establishment of fund to address the impact of factory operations (“Fund”) to provide the financial support to prevent such problem.
According to the Draft, the Fund will collect the security from the factory listed in Group 2 and Group 3 in the amount of fivefold of the annual fee of the factory. The placement of a security deposit shall be made before the commencement of the factory operation and continue annually until the factory ceases its operation. The rationale behind enactment of this measure put emphasis on the significance of the Polluter Pays Principle or the PPP.
Apart from the solution on the illegal disposal of industrial waste, the Draft also covers the issue on the inability of the competent official to issue orders to the factory operators, who have been ordered to shut down the factory operation under the Act. It appears that the order to shut down the factory operation effectively revokes the factory operation license. As a result, the competent official is unable to issue its order to the factory operator, who is no longer considered to be the factory operator and has no right to take actions in accordance with the order to modify the factory and ensure it poses no harm to people or the environment. The key concept of the amendment considers the factory operator to have the status of the factory operator until it completes all actions as required by the order of the competent official.